U.S. grain futures surged Monday as commodities recovered from heavy selling last week and poor weather threatened global output.
Soft red winter wheat shot up 31 cents, or 4.1%, to $7.90 1/2 a bushel, while corn climbed 21 1/4 cents, or 3.1%, to $7.07 1/2 a bushel. July is the most-actively traded contract in each market.
Surging prices for crude oil and precious metals and weakness in the U.S. dollar rekindled buying interest in the grains amid ideas that last week's declines were overdone. Wheat lost 5% last week and corn sank 9% as broad selling engulfed commodity markets.
"I'd say it marks the end of the correction in commodities in general," Bill Gentry, analyst for Risk Management Commodities, said about the rally.
Wheat futures led the recovery as concerns increased about dry weather hurting output in the southern U.S. Plains and Europe. In Kansas, the top U.S. producer of bread wheat, temperatures topped 100 degrees during the weekend, adding stress to crops after months of drought.
France and Germany also missed out on rains. Forecaster WeatherEdge Ltd. warned each country may have lost 15% to 20% of their wheat crops due to weeks of persistent dryness.
Paris wheat prices staged a blistering rally on the back of expanding forecasts for global crop losses, lending spillover support to U.S. wheat. The front-month Paris May wheat contract gained 11.6%.
Traders are assessing the condition of wheat crops in the Northern Hemisphere ahead of the upcoming harvest. Futures soared last year when harsh weather, including a historic drought in Russia, slashed global output and prices reached 2 1/2-year highs in February on increased demand. They have since pulled back 15% at the CBOT.
"Eastern France and Germany are really at risk of substantial wheat-yield falls," said Edward Smith, consultant meteorologist at WeatherEdge.
Corn and soybean futures felt spillover support from wheat's rally and from gains in external markets. The grains are linked to crude oil because ethanol is made from corn. A weak dollar supports the markets because it makes dollar-denominated commodities more attractive to foreign buyers.
Corn traders are keeping an eye on weather, as well. Warmer, drier conditions favor limited fieldwork in the eastern Corn Belt after delays due to excessive rains and cold, although unfavorable precipitation is returning to areas west of the Mississippi River, said Brad Rippey, agricultural meteorologist for the U.S. Department of Agriculture.
The government, in a weekly crop progress report Monday, is expected to estimate corn plantings are about 30% complete. A week ago, the crop was 13% sown, below the five-year average of 40% for that time of year.
Soybeans struggled to keep pace with gains in corn and wheat, as demand for the oilseed is weak. Soybeans for July delivery ended up 9 cents, or 0.7%, at $13.35 a bushel.
Oats for July delivery advanced 3.2% to $3.50 a bushel, while ethanol for July delivery rose 1.8% to $2.559 per gallon. Soymeal for July delivery added 0.1% to $350 per short ton, and soyoil for July delivery gained 1% to 56.22 cents per pound. Rice futures bucked the stronger trend in the grains, with the July contract dropping 1.6% to $14.12 1/2 per hundredweight.
At the Kansas City Board of Trade, hard red winter wheat for July delivery bolted 4.6% higher to $9.14 1/2 a bushel on concerns about the crop in the southern Plains. Hard red spring wheat for July delivery rallied 4.5% to $9.44 3/4 a bushel at MGEX in Minneapolis.
--Caroline Henshaw and Neena Rai in London contributed to this article.